LO3: different organisational structures

Question 1

What is an organisational structure?

Answer 1

a formal way of outlining the way that authority, responsibility and information will flow in a business.

Question 2

what three ways can organisation be taken around?

Answer 2

-functions
- products
-geographic area

Question 3

what is a functional approach?

Answer 3

this approach separates a business into departments

Question 4

advantages of a functional structure?

Answer 4

• departments will employ specialists
  -its clear who is responsible for what
  -everyone knows their roles

Question 5

disadvantages of a functional structure?

Answer 5

-departments may have their own agenda
-co-ordinating activities may be complex as more people are involved
-decisions take longer

Question 6

what is a product approach?

Answer 6

this approach separates a business according to the type of products it manufactures.

Question 7

advantages of the product approach?

Answer 7

-it allows the business to focus on products
-it creates competitiveness within the business
-each product can be a separate profit canter

Question 8

what is a geographical approach?